In Certain Underwriters at Lloyd’s v. National Railroad Passenger Corp., No. 14-cv-4717 (E.D.N.Y. Feb. 19, 2016), the magistrate judge held that disclosure of privileged communications to London brokers for the purpose of distributing information among participating insurers in the London Market waived otherwise applicable privileges. In this declaratory judgment action brought by London Insurance Market insurers against Amtrak relating to environmental claims on more than three decades of liability policies, Amtrak sought to compel insurers to produce communications from insurers’ counsel that had been disclosed to third-party London brokers. Insurers argued that the unique structure and long-established custom and practice in the London Market should not be deemed to waive privilege. Insurance in the London Market is placed through a lead underwriter, who establishes the terms of the coverage, and other insurers then “subscribe” to a portion of the risk. When a claim arises, the insurers’ typically are jointly represented by the same counsel. Counsel communicates with the lead underwriter, who then relies on the broker to make the attorney reports available to all subscribing insurers. The court noted that in the 1980s and 1990s, the London Market retained U.S. law firms to advise insurers on environmental, asbestos and health hazard claims. The U.S. lawyers would send attorney reports to a servicing company for the London Market, which would then forward the attorney reports to the London brokers. The brokers put the reports in a claim file and walked them around the market to each of the individual insurers, who would review them, if they wished to. The file was then returned to the broker. Amtrak argued that disclosing the attorney reports to non-attorney third parties waived the privilege. The insurers responded that using brokers was “standard” and “necessary” in the London Market, and was understood not to waive privilege. The court rejected the insurers’ position and held that the disclosures waived privilege. The court explained that, although there are situations in which disclosure to agents of counsel or the client does not waive privilege, that exception is limited to situations in which the agent’s participation “improves the comprehension of the communications between attorney and client,” such as a third-party accountant or foreign-language translator hired to assist the lawyer provide legal advice. The court found that the brokers did not play an analogous role, but instead acted as nothing more than an intermediary or clearing house for the insurers. The court rejected insurers’ assertion that the brokers were “necessary,” and found that there was nothing in the record to suggest that using the brokers was the only way for counsel to communicate with the insurers. In addition, there was no evidence that the attorneys had retained the brokers, or that there was an agency relationship with the insurers. The court found that the lack of evidence was particularly troubling “given the dual agency of the London brokers, who represented Amtrak during the negotiation over and purchase of the Policies.” The court concluded that the insurers failed to establish that the attorney-client communications distributed through the brokers were intended to be, and were in fact, kept confidential.